One of the lessons I learned slowly and painfully has to do with income vs. wealth.
First, let’s clarify the difference between ‘income’ and ‘wealth.’
Entrepreneurs tend to focus more on the former than the latter. And many enjoy very high incomes for many years without ever converting any of it to wealth.
Sales, profits, and income are all important, but none of them directly produce wealth. (Tweet this!)
Wealth comes from the creation of value (not income) and from prudent investment.
I wasted years of opportunity thinking in terms of merely making sales and generating income until I shifted my thinking to creating valuable assets.
I can assure you, if you haven’t or don’t focus on asset-building rather than just income, you will forever need income.
Incidentally once I went into asset-building mode, and focused first and foremost on that over a period of about 7 or 8 years, I began to harvest wealth from the assets. I was able to make lifestyle choices… some of which involved my selling off assets and extracting the remainder of the value for investments.
And because of my asset-building years, I am now in position to be content working for wages, high wages, but wages nonetheless because I no longer need income.
Once you re-calibrate your thinking about your business and your job from just focusing on making sales and generating income to creating assets, you’ll need SYSTEMS that build assets and asset value.
There are four basic categories of Asset Building Systems:
- Rounding up the herd
- Retention of the herd
- Ascension of the herd
- Management of the herd
Within each of these categories you will need systems in place. For example, rounding up your herd will require a system for market selection, media selection and lead generation, among others. Retention will require systems for managing relationships, product development, delivery, etc. Ascension will require rewards such as incentives and a visible ascension ladder. Management requires a self-management system, financial analysis system, and so on.
What do I mean by “system?”
Michael Gerber, author of E-Myth defines “system” as something duplicateable, franchiseable, so your business is like a McDonalds. Another way of looking at it is simply: the same thing being done the same way every time, on a set schedule.
So, for example, if you are presented with or gather up a collection of relevant sales, customer behavior, ad response statistics every Monday morning to analyze the preceding week, that’s a system. If you do it randomly and look at different numbers each time and lack a set of criteria for evaluating them, that ain’t a system.
If you have a series of three letters to upgrade members from one level to the next and apply this to groups of members as they hit the 6-month mark, then every month, the next group hitting the 6th month gets the three letters, that’s a system. If you attempt to upgrade members at random, that’s not a system.
You’ve got to have good systems. It’s the key to creating the lifestyle you want. It’s the key to having the freedom to work with people you like, doing work you enjoy, where and when you want.
If I challenged you to show me and teach me to “operate” your system for each of the above items on the list, could you?
If “no,” make asset building systems a top priority.
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